How booming is the home improvement market? It's so popular that homeowners are expected to spend nearly $325 billion dollars on remodeling and repairs this year, according to Harvard's Joint Center for Housing Studies.
Usually you decide to remodel or renovate your home when you're ready to upgrade worn-out areas, want to add new feature, or simply because you're ready for a change. But like any good investment, you should get a return on the money you're spending.
The National Association of Realtors and the National Association of the Remolding Industry recently came out with the "Remodeling Impact Report," which surveyed contractors and Realtors, looked at cost spent and the impact on home values by project.
Based on that data, CNBC came up with some tips on which projects homeowners might want to follow as they pursue their quest for the perfect home.
Best Indoor Remodel Project: Kitchen
The No. 1 interior improvement that upped the value of a home was a complete (or even partial) kitchen remodel. According to the NAR/NARI report, that's the renovation that has the greatest appeal to buyers, and is most likely to add resale value.
Upgrading a kitchen costs about $30,000 on average, according to the data, but homeowners are able to recoup about $20,000 when they sell.
Worst Indoor Remodel: Closet Renovation
One of the lowest-scoring interior remodeling projects is closet renovation. Only 1 percent of Realtors said a new closet helped them close the deal on a sale. That said, at about $3,500 on average, it's not very costly to do this upgrade. Realtors estimate you'll recover over half of the costs you put into it in the sale.
Best Outdoor Improvement Project: New Roof
When it comes to the outside of the home, buyers apparently value structural over decorative improvements to the interior. The No. 1 exterior renovation was a new roof, as nearly one-third of Realtors surveyed said that project helped close a sale on a home. Plus, this is a renovation that more than pays for itself.
Getting a new roof may run about $7,600 on average, while the value you are able to recover from doing this project may be as much as $8,000. You can recoup as much as 105 percent of your investment!
Worst Outdoor Improvement Project: New Fiberglass or Steel Front Door
Meanwhile, the lowest-scoring outdoor renovation was updating the front door only. A slim 1 percent of Realtors said this improvement helped cinch a deal for them — although about 75 percent of the value of the project can be recovered. A new steel or fiberglass front door costs about $2,000 to 2,500, according to the report.
The bottom line: Since home renovation projects can cost several thousand dollars, make sure you do it right. Unless it's a very small-scale project it pays to hire a professional. And don't be afraid to haggle to help lower your costs. Consumer Reports found in a recent survey of contractors that 96 percent said they would be willing to negotiate the price of a project.
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